Why You Should Not Ignore Active Funds
Timothy Armour gave his opinion on the debate between active funds and passive funds earlier this year. He started by pointing out that many active funds charged expensively and gave mediocre results. Armour acknowledged the investment philosophy of Warren Buffet of buying shares for the long term by investing in passive funds. He said that investors should not fall into the trap of choosing a side when comparing the two funds. Armour added that both of them have their advantages and disadvantages. This means that none of them is a safe bet.
Armour advised investors to be wise when looking for an active fund to invest. He noted that the fees that an investor pays end up eating into the returns that they make. He advised people to find active funds that did not charge excessive fees. Low expense guarantees the investor that they will maximize the returns that they get. Armour explained that the confidence that a fund manager has in the fund is a good indicator of the investment approach that the firm takes. The fund is likely to perform better on average if the fund manager invests their money alongside institutional investors. It will also have better terms because the managers are directly involved with the operations.
Timothy Armour is the chairman of the Capital Group. He took up the position in June 2015 when Jim Rothenberg passed away. Armour said that the company had lost a great leader who was responsible for leading some of the firm’s initiatives. Armour is also an equity portfolio manager. He works at the Los Angeles office. Samsung Asset Management and the Capital Group announced a partnership a few years ago.
The two firms would work together in Korea. The country had a growing number of retirees. Timothy Armour said that there was a need to develop investment products and vehicles that were suitable for the Korean market. He recognized the role that Samsung Asset Management played in the Asian market and said that this is the reason why the two firms decided to work together.